China to turn Silk Road city into special economic zone

At the Sunday market in Kashgar, it isn’t a wild stretch to imagine commerce as it might have been in the 13th century when Marco Polo passed through this Silk Road oasis: Smooth-faced boys wrangle with horses, sheep and camels. Mounds of melons and grapes are stacked on the bare wooden planks of mule-drawn carts. A wizened man wearing a skullcap sharpens knives on a lathe operated by foot pedals.

But modernity is catching up with a vengeance, as the Chinese government yanks the nation’s westernmost city, despite the misgivings of many residents, into the 21st century.

Kashgar is slated to become a special economic zone, and the signs of change are already visible.

Developers from China’s east coast are snapping up land in the area, residents say. Concealed behind a row of graceful poplar trees along the main road to the airport, newly erected green wire fences delineate plots of land slated for development: a factory that makes instant ramen noodles for export to Pakistan and Tajikistan, a warehouse for wheat also headed for central Asia.


Tents for construction workers are pitched near empty lots behind the Kashgar Central and Southern Asia Industrial Park, which according to the state press, is being expanded from two square miles to 60. Even on a Sunday afternoon, crews were leveling an access road.

“This land used to be desert. Nobody was interested in it,” said a 35-year-old local businessman. “Now rich people from the east are coming and buying everything they can.... They buy the land. They put in roads. Then they put a wall around it.”

Chinese officials hope the economic zone status will do for Kashgar what it did for Shenzhen, the South China Sea fishing village that 30 years ago launched China’s transformation into a manufacturing superpower. Whereas Shenzhen’s wares head by sea to Korea, Japan, Australia, Europe and the United States, Kashgar is viewed increasingly as the launch pad into Pakistan and India, as well as some of the former Soviet republics in Central Asia, Kazakhstan, Kyrgyzstan and Tajikistan.

“We want to restore Kashgar to the position it had in the days of the Silk Road,” said Wang Ning, an economist with the government-run Academy of Social Sciences in Xinjiang, the far-western region where Kashgar lies.

“The plan is that by 2020 we should close the gap between east and west and allow the west to share in the prosperity of the east,” said Wang, who is based in Xinjiang’s capital, Urumqi.

But Kashgar residents are suspicious of such claims, knowing that economic development in China often involves policies that allow outsiders to grab most new wealth. Until a decade ago, 90% of Kashgar’s 355,000 permanent residents were Uighurs, a Turkic people whose language, appearance and Islamic faith more closely link them to Central Asia than to Beijing. New census data won’t be available until next year, but activists suspect that the Uighur population has dropped to 70% with the migration of of about 150,000 Han Chinese to Kashgar.

Ignoring protests from preservationists abroad, the Chinese government last year bulldozed most of Kashgar’s historic old city, destroying 85% of the labyrinthine alleys of mud-brick houses in the name of earthquake safety. The ochre-colored alleys and archways were so evocative of Old Kabul that the old city was used as the setting in 2007 for the filming of “The Kite Runner.” Only a small section is left today for tourists. About 200,000 people, almost all Uighurs, are being relocated to bland, modern apartment buildings in the suburbs.

“It is all part of a wholesale attack on the Uighur identity,” said Nury Turkel, a Kashgar-born lawyer and activist who lives in Washington, D.C. He believes the economic zone will be more of the same, with the best opportunities accruing to Han Chinese outsiders. “The Uighurs can’t even get loans from banks. How are they going to open businesses?”

Although the Uighurs, by dint of their location at the crossroads of Europe and Asia, were traditionally traders, they have been squeezed out by tough Chinese policies that have made it difficult to obtain passports.

“If you go to Bishkek, you’ll see maybe 50 Uighurs, but thousands of Chinese. They’re making easy money,” said the 35-year-old businessman, who like most Uighurs in Kashgar would not permit his name to be used because of the perils of criticizing the Chinese government. The economic zone, he said, may “help some of our young people get jobs in factories at low salaries, but the big money is not for us.”

Other than Tibet, no region in China is more ethnically fraught than Xinjiang (Chinese for “new territory”). Sporadic bombings and attacks have included an incident two years ago in Kashgar in which two men rammed a dump truck into a crowd of police officers out on a jog.

The worst race riots in recent Chinese history, which left hundreds dead, erupted last year in Urumqi, about 700 miles away. The initiative for the economic zone grew in part from that unrest. Many economists, Han Chinese and Uighur alike, saw the roots of the violence in high rates of unemployment among young Uighur men.

And so in May, Chinese President Hu Jintao announced a $15-billion-a-year investment package at a special meeting of the Politburo on Xinjiang’s economic future. The economic zone, like its inspiration, Shenzhen, will feature tax breaks, investment incentives and easing of regulatory requirements for new businesses. Along with the central government, the city of Shenzhen is sponsoring the Kashgar project, transferring $1.5 billion this year alone to support the new zone.

Much of the property in Kashgar is now owned by investors from Wenzhou, a city near Shanghai whose entrepreneurs are considered modern-day Marco Polos for their love of exploring and tapping the wealth of exotic realms.

Real estate agents from Kashgar were quoted by the Xinjiang Business Daily saying that prices for apartments went up as much as 30% and commercial property as much as 40% from March to July.

“Before locals bought apartments just for themselves. Now more and more speculators are coming in,” one real estate sales manager told the newspaper.

Shortly after the article ran July 1, the General Administration for Press and Publications forced the newspaper and one other that reported on the real estate boom to run retractions and pay fines of $4,200 each for stories that “caused serious negative impact.”

For China, Kashgar is a modern-day version of the wild west, a remote and exotic destination far closer to Afghanistan (160 miles) than to Beijing (2,100 miles). The first direct flights were introduced only in September.

The city is a convenient shopping hub for Central Asian businessmen, who arrive on tour buses and leave with vinyl shopping bags stuffed with Chinese-made wristwatches, DVD players, cellphones and athletic shoes to sell back home. With the exception of some artisanal knives and rugs, almost all the merchandise today is manufactured on China’s east coast, something that should change with the economic zone status.

However, the Shenzhen phenomenon won’t be easily replicated. The routes to western border crossings out of China run through harsh desert and wind-swept mountain passes frequently closed by weather and political turmoil.

Dru Gladney, an expert on Xinjiang at Pomona College, says Uighur economists believe job preference should be given to people with local hukous, or residency permits, so Kashgar’s Uighurs as well as longtime Han Chinese residents get first crack at jobs. But he is pessimistic.

“If these guys are coming from Wenzhou to invest in Kashgar from outside, they’re going to hire people from Wenzhou. That’s how it works in China,” Gladney said.